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Assignment Questions
Q 1. Union ltd. is registered with an authorized capital of $ 800 000 divided into 300000 Ordinary share of $ 2 each and 200
000, 10 % preference shares of $ 1 each. On 30 the April, 2001 after the completion of trading and profit & loss account the
following balances remained in the books.
Account balances
Debit $
Credit $
Ordinary share capital
5 00 000
10 % Preference Share Capital
1 00 000
Premises at cost
3 80 000
Machinery and Plant at cost
3 10 000
Motor vans at cost
60 000
Retained earnings b/f
10 000
Preference dividends owing
10 000
Ordinary share dividend owing
20 000
Stock
52 000
Debtors
40 000
Creditors
15 000
Cash in hand and at bank
31 000
Provision for depreciation
Machinery and Plant
1 35 000
Motor vans
20 000
!0% Debentures redeemable 2010
30 000
Debenture interest owing
3 000
Share premium
30 000
Total
8 73 000
8 73 000
Prepare for Union Ltd. a balance sheet at 30.04.2001 showing clearly the working capital and the shareholders fund.
Q2 .

The final accounts of Moir Ltd. are prepared on 30th April each year. On 30th April, 2002 after the profit and loss
account had been prepared the following information was available.
$
Authorized capital
300 000 Ordinary shares of $ 1 each
300 000
Issued capital, fully paid
120 000 ordinary shares of $ 1 each
120 000
Freehold premises at cost
100 000
Plant and Machinery at cost
75 000
Provision for depreciation on Plant and Machinery
35 000
Profit and loss account credit balance
33 190
10 % debentures
10 000
Cash at bank
8 500
Stock at 30th April, 2002
25 000
Trade creditors
9 450
Trade debtors
8 200
Expenses prepaid
940
General reserve
10 000
From the above information prepare a balance sheet as at 30th April, 2002. Your balance sheet must show sub-totals
for fixed and current assets, current and long-term liabilities.
Working capital must be identified within your balance sheet.

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Q 3. Summertime Ltd, has an authorized capital of $ 1000000 consisting of $ 8 00 000 Ordinary Shares of $ 1 each and $ 2
00 000, 10% Preference Shares of $ 1 each. After completing the trading, profit & loss a/c for the year ended 31.03.2003,
the following balances remain in their books:Account Balances
Debit $
Credit $
Issued Share Capital
Ordinary Shares
8 00 000
10 % Preference Shares
1 00 000
Land and buildings at cost
6 64 000
Motor vehicles at cost
2 40 000
Fixtures & Fittings at cost
1 50 000
Provision for depreciation
Motor Vehicles
60 000
Fixtures & Fittings
38 000
Debtors & Creditors
18 000
12 000
Stocks
68 000
Bank
60 000
Cash
4 000
General Reserve
32 000
Profit for the year
1 40 000
Retained Earnings
12 000
9% Debentures
50 000
Interim Dividend paid
40 000
Total
12 44 000
12 44 000
The directors proposed:
1. to pay the preference dividend in full
2. to pay a final dividend of 8% on the ordinary shares
3. to transfer $ 20 000 to general reserve
Prepare the profit and loss appropriation a/c and the balance sheet of the company.
Q4.

The following balances appeared in the books of XL ltd, as at 31.12.2003

$
Premises
1 06 000
Equipment
27 000
Authorized & Issued Capital
70 000
10% Debentures
20 000
Stock in trade
4 500
Debenture interest owing
1 500
Profit & loss a/c on 01.01.03
3 200
Cash at bank
5 220
Creditors
6 000
Debtors
3 000
Provision for depreciation on equipment 12 600
Net Profit for the year
32 420
The following additional information is also available:
1. $ 5 000 is to be transferred to general reserve
2. A dividend of 12% is proposed on ordinary shares
Prepare the profit & loss appropriation a/c for the year ended 31.12.2003 and a balance sheet extract showing working
capital and shareholders funds.

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Q 5. Sound Sense plc. has an authorized share capital of
500 000 ordinary shares of $ 1 each and 200 000 10%
preference shares of $ 2 each.
After the trading and profit & loss a/c had been prepared for the year ended 31.03.2003, the following balances
appeared in the books of the company.
$
Issued Share Capital
400 000 ordinary shares of $ 1 each
4 00 000
50 000, 10% preference shares of $ 2 each
1 00 000
Net trading profit for the year
60 000
Retained earnings b/f
17 000
Debtors
26 000
Creditors
14 000
Bank (credit balance)
10 000
General Reserve
12 000
Interim ordinary dividend paid
12 000
Premises at cost
3 00 000
Equipment at cost
2 25 000
Motor Vehicle at cost
86 000
Provision for depreciation
on Equipment
62 000
on Motor Vehicles
20 000
Closing Stock
46 000
Additional Information;
1. $ 35 000 should be transferred to general reserve
2. Preference dividend to be paid in full
3. A final dividend of 2% on ordinary shares is proposed by the directors
Prepare the profit & loss appropriation a/c for the year ended 31.12.2003 and a balance sheet extract showing working
capital shareholders funds.
Q 6. Hallom Limited has a registered capital of $ 6 00 000 divided into 4 00 000 ordinary shares of $1 each and 2 00 000 6%
preference shares of $ 1 each.
The following balances remained in the accounts of the company after the trading and profit and loss accounts had
been prepared for the year ended 30th April 2003.
Debit $
Credit $
Debenture interest accrued
175
7% debentures
15 000
Ordinary share capital: fully paid
4 00 000
6% preference share capital: fully paid
10 000
Cash at bank
25 000
Profit and loss account balance on 1st May 2002
90 000
Debtors & creditors
20 000
8 600
th
Net profit for the year ended 30 April 2003
40 400
Machinery and plant at cost
200 000
Provision for depreciation on machinery and plant
50 000
Stock
39 175
Premises at cost
3 50 000
General reserve
20 000
Total
6 34 175
6 34 175
The directors have recommended the following:a. a transfer of $ 5000 to general reserve

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b. an ordinary share dividend of 10%
c. a provision for the full years preference share dividend
You are asked to:1. Prepare the profit and loss appropriation account for the year ended 30 th April 2003
2. Prepare a balance sheet at 30th April 2003, showing fixed assets, current assets, current liabilities, working capital
and shareholders fund.
Q 7.

Perez plc. had an authorized capital of $ 2 00 000 divided into 1 50 000 0rdinary shares of $ 1 each and 50 000 8%
preference shares of $1each. The following balances remained in the accounts of the company after the trading and
profit loss accounts had been prepared for the year ended
31st Dec 2003.
Debit $
Credit $
Ordinary share capital; fully paid
1 00 000
8% preference shares; fully paid
20 000
Machinery and plant at cost
60 000
Provision for depreciation on machinery and plant
20 000
Premises at cost
1 00 000
Profit and loss account balance(1-1-2003)
16 450
st
Net profit (for the year ended 31 Dec. 2003)
18 052
Light and heat
560
Cash at bank
8 500
Stock
6 000
Debtors and creditors
2 200
1 788
Insurance
150
Total
1 76 850
1 76 850
Directors have recommended an ordinary dividend of 7% and wish to provide payment of the preference share
dividend for the year.
Prepare for the Perez plc:a. the profit and loss appropriation account for the year ended 31st Dec 2003
b. the balance sheet as at 31st Dec 2003 only the part which shows the share holders fund and the working capital.

Q 8.

Graphic Limited has the registered capital of $ 5 00 000, divided into 3 00 000 ordinary shares of $1 each and 2 00
000 10 % preference shares of $ 1 each. The following balances remained in the books of the company after the
trading and profit and loss accounts had been prepared for the year ended 30 th April 2003:Premises at cost
Ordinary share capital(fully paid)
10% preference shares ( fully paid)
General reserve
8% debentures
Share premium
Cash at bank
Debtors & creditors
Profit and loss account balance on 1st May 2002
Net profit during the year
Machinery and plant at cost
Provision for deprecation on machinery and plant
Good will
Stock
Provision for bad debts

Debit $
3 20 000

Credit $
2 00 000
1 00 000
8 000
30 000
10 000

10 000
9 800

15 000
60 000
40 000

1 70 000
95 000
20 000
15 920
920

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Debenture interest accrued
Salaries
Insurance
5 000
Interim ordinary dividend paid
10 000
Total
5 60 720
At 30th April 2003, the directors recommended:a. to increase the general reserve by $ 20 000
b. an ordinary share dividend of 8 per share on ordinary share capital
c. a provision for preference share dividend in full
Required to prepare at 30th April 2003
1. the profit and loss appropriation account
2. the extracts of balance sheet showing shareholders fund.

1 200
600
5 60 720

Q 9. The authorized capital of XYZ Limited is $ 5 00 000 divided into 5 00 000 0rdinary share of $ 1 each.
The following balance sheet was extracted from the companies books for the year ended 30 th September 2003:Assets
$ Liabilities
$
Land and buildings
1 50 000 Issued and paid up capital
Motor vehicles
170 000 Ordinary shares of $1 each
4 00 000
Machinery
1 20 000 Trade creditors
17 500
Stock
30 000 Bank loan
27 500
Trade debtors
13 000 General reserves
50 000
Cash in hand
17 000 Retained profit
30 000
Cash at bank
25 000
Total
5 25 000 Total
5 25 000
st
During the 1 week of October 2003, the following transactions took place:1. $ 10 000 of the debtors was paid by cash $ 9 500 in full settlement.
2. Remaining ordinary shares were issued and fully paid up by cheque.
3. $ 21 000 cost of goods was sold for $ 28 000 on credit.
4. One old motor vehicle was sold for $ 10 000. The payment was received by cheque immediately. The
book value of the motor vehicle was $ 9 500.
5. Cash deposited in the bank $ 10 000
6. Bought goods on credit for $ 7 500
Prepare the balance sheet of XYZ Limited in vertical form at 7th October 2003, after showing the adjustments to each
item regarding the above transactions.(the adjustments should be shown in brackets)
Q 10. The following trial balance was extracted from the books of a Limited Co. at 31st Dec 2002, immediately after the
preparation of its Trading & profit and Loss A/C. Its Authorized capital consists of 3 00 0000 ordinary shares of $ 1 each
and 1 50 0000 preference shares of $ 1 each.
Account balances
Issued share capital
2 00 000 ordinary share of $ 1 each
1 00 000 15% Preference shares of $ 1 each
12% Debentures
Interim dividend paid on Ordinary shares
Share Premium Account
Good will
Debtors and Creditors
Salaries owing
Plant & machinery at cost
Buildings at cost

Dr $

Cr $
2 00 000
1 00 000
15 000

12 000
5 000
8 000
16 000
1 50 000
1 10 000

9 000
1 300

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Stock of goods
Cash at Bank and in hand
Net profit during the year
Furniture & fixtures at cost
Provision for depreciation on:Plant and Machinery
Buildings
Furniture and Fixtures
Total

42 500
23 300
57 000
40 000

4 01 800

5 000
5 500
4 000
4 01 800

Additional information:2. The Co decided to pay the dividend on preference share capital
3. A final dividend of 5p per share is to be paid on ordinary share capital
4. $ 5 000 should be transferred to the General Reserve Account.
Required to:a. Prepare the Profit and Loss appropriation A/C and the Balance Sheet as at 31st Dec. 2000
b. After preparing the balance sheet, calculate:i.
the current ratio
ii.
the liquid ratio
iii.
the N/P to sales ratio if the cost of goods sold was $ 1 25 000 and G/P was 1/5 on cost.